Investec to spin-off fund manager in bid for money 'super league'

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Anglo-South African bank Investec is to spin-off its fund management division and list it on the London stock market in a bid to play in the “super-league” of money managers. 

Investec Asset Management, which looks after £109 billion for investors, will debut on the FTSE 250 within the next 12 months, it said on Friday.

City analysts estimate the division, which has been run at arms length from the bank for some time, is worth about £1.8 billion.

“If you want to play in the super league in asset management, independence wins,” said asset management chief executive Hendrik Du Toit.  

The separation of the funds arm comes after a shake-up at the top of the firm, with founders Stephen Koseff and Bernard Kantor giving up the reins to co-chief executives Fani Titi and Du Toit.

The move is designed to simplify the complex group, which has a bank, wealth management and funds arm and a dual listing in South Africa and the UK. 

Investec will remain dual-listed in London and Johannesburg and be led by Titi. Investec Asset Management will have a primary listing in London and be led by Du Toit.

Investec is set to keep a small stake in the asset manager. 

Several banks like Deutsche Bank and Société Générale have spun off their fund manager operations in recent years. Insurers like Prudential, which is de-merging M&G, and Old Mutual have also hived off fund operations. 

Fund manager businesses are generally valued more highly by investors as standalone entities. 

Du Toit said going alone would benefit the company. “We have no ambitions to be like BlackRock but if you look at them, they were essentially twice held by large banking groups and twice moved themselves away. Their independent trajectory is what really catapulted them.

“The real big winners in our industry are independent focused firms with very significant employee participation. That simplicity provides an opportunity to focus on the real job at hand, which is to run people’s money.”

Investec is advised by JP Morgan Cazenove and Fenchurch Advisory.

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September 14, 2018 |
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